tv Money Moves With Deirdre Bolton Bloomberg January 24, 2014 2:00pm-3:01pm EST
a little bit. starbucks says no, that is just perception. if people are standing to the side waiting for pastry products and people are sinning to the side, waiting for pastry products. the store looks more crowded. maybe it feels more crowded. starbucks is the actual speed you are going through the line has not changed, and they are constantly trying to improve that. >> interesting it continues to be a conversation. ♪ >> welcome to "money moves," where we focus on alternative assets. what investors and entrepreneurs
are doing, as well as what is going on in hedge funds, private equity, real estate, and more. the stings for nannies, babysitters, pet sitters -- they the largest.com, online care site in the world. the company just went public. the founder and ceo will be joining us shortly for the new york stock exchange. a company will tell us about building a smart grid solution for homes am and what the google purchase of nest means for the sector. managing risk from the fragile five. how to trade the worst selloff in five years time. for stop, sac capital front and center. the case against it, as far as insider trading goes, the developments yesterday in the trial of matthew mark, -- martoma. this story has been going on more than a year now.
you have stopped counting, of course. that there was a bombshell that went off yesterday, concerning information the fbi gave to the star witness. it? was why is it important for the case? ask the dr. on cross-examination , the fbi told him they were grains of sand wanted in the arrest of someone else. they have never completely cohen washat colin -- really the target and it was about him all the time. was the fbi's stupid? why would they give up that information to somebody they eventually wanted to question? what is the strategy? >> they were trying any tactic that seemed like it might possibly work. in other words, do not worry
about you. we are not going to throw you in jail. we are really after this big guy. thought this pressure tactic might persuade gillman to help them, which he eventually did. >> how is the trial going so far? you alluded to dr. gelman as the star witness in the case against matthew martoma. what has come out so far? is anything going to change? >> gilman is 81 years old, quite fragile looking, hard of hearing. he needs things to be repeated to him multiple times. but he has held up remarkably well under intense questioning. he admits he does not remember a lot of things that happened. the events in question are between 2006-2008. what he has repeated over and over, and it seems sincere, he is there to tell the truth. >> he has also said he is embarrassed and was hoping the whole thing went away.
he said he had developed a father-son surrogate relationship with martoma. >> that is the picture, that martoma made friends with him, look for ways to be nice to him. gilman started to see him as a friend and a lost son. that led to his disclosure of all sorts of confidential trial data. goes, thiss the jury is a really different mix of people than what we saw with the mike steinberg trial. collar, more blue working class, for lack of a better term. this jury -- there are people who work for accounting firms. it seems like more of a professional class, for lack of a better term. like steinberg was convicted. he is a current portfolio manager. this jury is quite educated, a number of people with graduate degrees and law degrees. they seem pretty alert, taking a
lot of notes. i have not caught many of them sleeping through all this in tents hedge fund -- intense hedge fund jargon. >> you are going to be keeping us up-to-date as the trial continues. the very latest on this insider trading case at sac capital. we are going to shift gears now, get you to the new york stock exchange. listings for nannies, babysitters, pet sitters -- they are all on care.com, the largest online care site in the world, 9.5 million members. the company just went public. you can see how it is trading so far. is the ticker. shares up better than 39%. the founder and ceo is with me now. companyyou started this in 2006 because you needed to solve your own problem. how did this come about?
>> my husbands parents were deceased and my parents were in the philippines, and i was an immigrant. we struggled with care. when my youngest son was young, my father cared for him and had 29, it attack all stop at became part of the sandwich generation, worried about childcare and senior care. a personal issue i went through, i was not alone. samefamilies have the issue, and we are here to help them. >> you have almost 65 5 million unique users per month. this is an incredible growth story. that is obviously why you chose to go public. you have access to greater fundraising. ?hat is the way forward for you i know you had close to $49 million in revenue. what is the way forward? >> we have 9.7 million members worldwide. we take away the benefit of acquisitions like 63% organic growth, but rarely touch the
surface. 42 million households in the united states alone. totala massive addressable market we are going after. we want to help millions of families and caregivers. out of curiosity, what factored into your decision to go public? >> to raise the overall awareness to help families. and take advantage of the fact that we could continue to acquire companies. companies inhree 2012 and one in 2013. there are ways for us to enhance our products and services so we can deliver more for our members. >> as far as future acquisitions, what area? you just told your own story. it started with child care and elder care. there is now pet care. a lot of different categories. where are you most interested strategically in growing? >> definitely in continuing to
expand our overall offering. also managed care. -- but at a come company in mid-2012. we are going to continue investing. care tends to be the highest budgetary item for dual income families. investmentcontinuing in product, helping families find and manage care. there may be more geographical opportunities for us. we expanded in western europe by acquiring. plenty of opportunities. our mission is to help find high-quality caregivers for families in a reliable and easy way. >> how has technology enabled the company? obviously, it is an internet company. that is the way people communicate. i know from using your site that it is helpful when babysitters put up pictures, blogs. there seems to be this ability to communicate may be better than through a traditional agency.
>> everything from paying your caregiver -- it is not easy to digitize the content. we can share 4 million caregivers, so families can find them easily through the internet and mobile, taking it super easy. >> congratulations on the listing. glad to have you with us. the care.com founder and ceo. when we come back, the slump in managed futures. what that plays in managing the risk from the fragile five. also, the big winner may not be the seahawks or the broncos. the champion of the super bowl may come with a side of blue cheese. ♪
managed futures. the drop is the most severe in the last three years, the longest in market history. i am joined by a manager and a managed futures hedge fund. bob wright is here as well. thanks for joining bob and i. managed futures right now is almost a dirty term. these products are in the gutter. most people, if they bought them, did not make any money. what does this mean for your business? >> you have to do differentiate. whichis managed futures is systematic, and there is global macro. it has actually been better. volatility,ention we have a chart to show how comment has been. hard, if you are counting on swings and the swings do not happen. >> you get the trend, and it pops right back down.
that has been the issue. just like last year, the foreign investor one. -- won. you are going to have volatility as the fed comes off. today is a great day. you see volatility in the space. >> you have been dealing more , withhe global macro managed futures, and not just a problematic one. >> a lot of people see managed futures as a trend-following bucket. there is more in the managed futures space. >> i think the lingo really is important. managed futures does tend to mean that to most people. if there are no trends to follow, with global macro, a lot of the best hedge fund managers can take a look at these trends that are developing very, very rapidly. they play with futures to get at
these trends very quickly. you can close it out every single day. you do not have overnight risk. a lot of institutions are looking at this now as they look at qe coming off an volatility rising over the next year. map. build this it is about a year before they happen. if you can look at this chart on screen, you will see this fragile five. in fairness, we are talking about a year ago. ems currency selloffs. we are looking for volatility? here is the volatility. what does this mean as far as how you are managing your business there? >> a lot of things with currency. commodities are priced in dollars. that is a big area we do a lot of work in the dollar, and how the dollar is going to move.
i think looking at the fragile five, looking at current account, seeing what is happening in the space, there is going to be a lot of activity. much is the fed coming off tapering a little bit? going to seeu are more and more of that throughout. it is great to see volatility finally come into the marketplace and create new opportunities for managed futures, asset classes. >> one of the things this illustrates that people did not appreciate is that qe is not a u.s. thing. it is done in the u.s., but the implications are profound around the world. we have over a trillion dollars of new liquidity. a lot of that money eventually finds its way into foreign countries, looking for yield. as qe comes off, the money tends to come back.
those countries really have problems managing the current account deficit. >> nothing happens in a vacuum. it seems for your business, it is all about currencies. you feel like you have some visibility. but with a wildcard. >> without a doubt. you do have supply and demand. look at what happened with natural gas. you live in the midwest. you understand the cold weather. >> you do not have to go to the midwest to understand cold weather. i am freezing and complaining about it to anybody who will listen. there is the natural gas chart. >> you have had over a 20% move this year alone. you are creating some volatility. the other space which is a pseudo-currency -- silver. what is the best asset class so far? gold miners.
tangent capital. calleds selloff of the so- fragile five is really an overreaction to the report that came out for chinese manufacturing? there are also fundamental reasons. >> there were fundamental reasons that apply both to china and to the emerging markets, and not just in asia -- also in latin america. a really, if there is slowdown in china, that is scary. it has an impact on the u.s. economy. it is not just a potential slowdown. conditions inside of china. have seen the shanghai libor index shoot up and down. in has been super volatile lately. there are questions about how stable the internal debt situation is.
we have priced china to perfection almost, assuming everything is going to be great. that is one part of the equation. another part is that we have many countries in the world, especially the fragile five, which are going to suffer currency outflows if the u.s. becomes a more attractive place to invest. that can create a separate set of problems for those countries. looking at the fragile five, argentina is not on this list. for people i speak with, people say there is a huge question. contagion andmic going through countries that are were just list -- we talking about china. there is a lot of trade. 14%k something like a devaluation in one day of the argentine peso, the most in five years or something. these are not small pains.
these are major issues. have of these countries debt maturing that they have to pay back in dollars. they have limited foreign exchange reserves to pay them back. that is going to create real problems. borrow more to dollars and pay much higher interest rates. these are fragile economies. they cannot really withstand much higher interest rates. that is causing the selloff in their equity markets, and hours in reaction to that. it is also causing selloffs in their currency markets. >> we were speaking with our last just about managed futures. he said that for him, volatility is good. for the average investor, is there a way to do this? >> this is one of the things we talk about all the time, the difference between some managers and other managers. i am not a fan of programmatic managed futures.
there are global macro managers who can play trends rapidly and tend to do it through futures. that is the fastest way of getting in and out, staying liquid, and reducing exposure overnight. global macro managers can be very effective at times like this. that is why that class is up something like 40% in 2008. >> they were able to see the big trends. >> very difficult for normal people to do this sort of thing. if they are going to try to play the emerging markets, you want to buy proctor and gamble. trying to play it yourself is dangerous. >> we are very close to 26 minutes past the hour. we are going to get you out to the newsroom, taking a look at emerging-market currencies, which are lower across the board. alex, what is standing out? >> you were talking about the selloff overall.
we are seeing that continue to play out in the markets. selloff continues to the downside, especially in the nasdaq, down by almost 2%. its worst week since june 2012. the s&p broke below 1800. 1770 is the next level traders are walking closer. the intraday moving average is a trend line traders watch. traders are looking for a rally in the next couple of days. they are putting their money in the treasury market. take a look at the 10 year treasury, set for the longest gains in nine months, a safe haven not only for the u.s., but the emerging-market field. in commodities, it is very cold.
>> we focus on innovative alternative invest. have your bloomberg top headlines at this hour. the eu is warning that the ukraine could head toward a civil war. antigovernment unrest is spreading from key out to other parts of the country. for testers have taken over government offices in five cities. clashes have left as many as five people dead and more than 1000 injured. havethan 3 million people signed up for health care plans
in the affordable care act. that includes the 8000 people who enrolled at the start of the year. the obama administration wants 7 million people signed up by the end of march. the price of natural gas rose for 1000ve dollars cubic feet, the highest level since june 2010. natural gas is used by half the nation's households for heating, making it the most important heating fuel. with energy, it is a huge topic for discussion at the world economic forum in dollhouse. christine lagarde spoke with francine lacqua about climate change policy and risk of energy complacency. >> one of my passions for 2000 14 and onward. that is climate change. i know some people try to minimize climate change. but i am sorry. if we want toal make sense for our children and
godchildren. clearly, what is coming up in the meeting in the united nations, called by banking moon -- by ban ki-moon, and next year in paris -- how to be meaningful, not meaningless. >> because of a crisis? >> when the house is on fire because of the economic crisis, and because the economy is drifting, you focus on the economy. and you lose a bit of what is generally seen as the medium- term risk. riskld say the medium-term is short-term, and needs to be dealt with in the short term. complacency is a risk. it is one of them. what we are seeing at the moment, to go with the optimism -- we are seeking
the recommendation of the moment. that is our analysis. all we are also seeing risks that should be of concern. we have new risks as well. essentially, what we believe is -- of thea reset the way the economy grows around the world. >> how would you do it? >> the old one, financial issue,ty, is still an especially developing here and there. unemployment.e there are 2 million people who do not have a job at the moment, and a growth rate that is too slow to respond to the market needs in terms of job creation. we have still an unbalanced growth, uneven growth. it is rebalancing, but we are not there yet.
look at when the recovery does consolidate further. numerous, we have tapering on the horizon, which is now beginning in the united states. there is a spillover effect, particularly on the emerging- market economies. about you only concerned inflation in europe? or is this something that can spread? >> we see inflation rates in general a bit lower than where they are targeted by central bankers. i do not think anybody can argue -- canat will stop as argue with that. particularly in the euro area, there is a risk that long-term inflation is also lowered. that has consequences for potential interest rates. in has a consequence in terms of the burden of debt on sovereigns
an agreement could be announced as early as next week. price that has been a knowledged on this deal. texas industries has a market value of almost $2 billion. they had been working with citigroup to try to find a buyer. talks started last week after they had previously hit a snag. as is typical of these situations, there still is a chance that no agreement might be reached. if you look at these texas industries shares, it looks like they have been halted at least momentarily, because they had searched so much after these headlines began to cross. but they surged 10% before they were paused as a volatility hope -- hope. -- a volatility halt. share reactions as well. you for that breaking
news. in the meantime, 30 years ago they, steve jobs unveiled computer, now larger than microsoft and amazon combined. here is a look at some of the first steps to becoming the world's most viable company. -- valuable company. >> today, for the first time, i would like to show you macintosh in person. >> hello. i am macintosh. >> that is what a computer is to me. it is the equivalent of a bicycle for our mind.
my cats and roast them, maybe. >> you love cats. >> we have three of them. grilled chicken wings are going to cost about 5% less this year, according to the national chicken council. it is cheaper to feed them. chicken food is about 2/3 of corn, and corn prices are down 30% last year. you have farmers recovering from that terrible drought in 2012. overall, you have global food inflation falling, and a trickle-down effect is interesting, i cuss if wings are cheaper, you might see better promotions during the super bowl. pork is also cheaper. >> probably not a day where people need a lot of arm twisting to drink beer and eat wings.
what about the idea of the lower feed cost helping production? of stats stick out? >> the lower feed costs. four percent more chicken will be produced this year. from a chicken, you get four wings. cold storage is at an all-time high as well. all of that is contributing at the lowest prices in the last four years. three to six months for a chicken to ramp up for slaughter. it is not that difficult if the demand is really there. for a cow, it takes about three years, to put that into perspective. that is a real tailwind not only for us, but for the companies who sell. look at buffalo wild wings. a huge difference in those margins. >> is the super bowl the biggest chicken wing eating day? >> it is the second-biggest eating day of the year in the
u.s., followed by eggs giving. at only 4.6% of all the chicken wings we consume every year are on super bowl sunday. we eat them the rest of the year, for sure. >> what about what this means for restaurants? we just had one logo up. i do not remember the name. they are going to sell a lot. >> buffalo wild wings. that is how many chickens we are going to eat. >> get the graphic back. >> 1.4 billion wings is how much we will eat. 30 times. that is how many wings. >> i want to see the path of who did that. will we also see a rotation into chicken regardless of the super bowl, because it is cheaper to or chicken than to buy beef pork? regardless, you asked about companies. buffalo wild wings made wings stand out.
they made them mainstream. they do not want to bring down their super bowl revenue, obviously. but there is about a five percent increase in consumption from the fourth quarter to the first quarter. that is mostly due to the big game day. what do you have a preference? >> i actually hate wings. >> you mean who is playing? >> i do not care. i will not be watching it. abi will have a wing. we will see. -- maybe i will have a wing. we will see. >> i will probably pick that it, as usual. me on thefor joining business of chicken wings and the super bowl. when we come back, the energy ceo, cutting-edge in the world of smart grid solutions. google's purchase of nest means. ♪
>> we focus now on eco-friendly technology. we have the ceo of the company here. a lot about talking this sector, because google purchased nest. , younest does for homes are doing for businesses. what kinds of businesses are your biggest clients. >> government facilities, hospitality. >> if i go into a hotel room -- i am complaining about the cold to anybody who will listen. that includes you. and leave mye heat hotel room, it is going. just. .hat crazy person is gone >> the room is only occupied about 30% of the time it is time,d out. 70% of the
the hotel is heating or cooling that room. that is a lot of loss. >> schools like nyu, uc davis. >> dormitories, very much. students are leaving those rooms. they do not want to be leaving the lights on. we automate the environment. when nobody is there to experience the benefits, we try to cut energy consumption. >> military as well. , people areilities not there 24/seven. -- not their 24/7. the government is paying that. our tax dollars are going toward it. it is really important to build in these controls. area, the connected home were connected business -- this is becoming super hot.
market dohare of the you need? as a ceo, what am i supposed to do? >> it can be a $23 billion market. an integration with other types of systems we work with. beyond building a management building demand response systems, utility automation systems -- that allows them to create the automation they are truly looking for. >> what is the biggest challenge for you? is it building the technology that makes these things work? is it more of a business issue? a right now, it is more of business issue. we have the technology in place to do this. we have standard light switches that replace the light switch in your wall. we do everything to control the energy costs.
the business case is making sure the roi is there. we want our customers to engage with the technology. >> the next steps? >> continue to increase the integration, working with utilities on the demand/response side. ability to participate in the next three years alone makes it really easy for our customers to move ahead. , you havenvironment your smart phone. you walk into your room, the temperature is automatically set for you. drapes open. lights come on. you stay somewhere else, you see the same type of environment. using the data in the cloud to create that environment for you, that is what is next for us. >> great to meet you. jason keener joining us. when we come back, a complete update on the markets. the dow, the s&p 500, and the
>> an update on breaking news from moments ago. it is higher after bloomberg news reported they are in advanced talks to acquire the building materials company according to people with knowledge of the matter. an agreement could be announced as early as next week. texas industries has a market value of nearly $2 billion and is working with citigroup to find a buyer. it is 56 minutes past the hour. hardest working woman in television, is back with us with the markets update. i see red. what are the reasons behind it?
>> the reason behind it is emerging-markets currency. the selloff continues to pick up steam. almost 30 points around the lows of the session. materials and industrials are down over numeral two percent -- 2%. all subsectors in the s&p in the red. we're just a week away from the super bowl. american carmakers spend big money on super bowl ads. u.s. auto sales are in resurgence. i brought in our resident car expert matt miller to tell us what to expect. how many commercials are we looking at? >> a lot. we are talking about seven carmakers at least that will have super bowl commercials. that is one more than last year. they are spending more and more. it is going to be about $100 million they spent collectively.
in second place, telecom media and tech. we are talking about spending that has grown fivefold over the last 10 years. they fell on rough times but they are back and stronger than ever. >> who are the main players? >> jaguar is going to come in this year and do an ad with ben kingsley. they figured jaguar is the perfect car for an evil v illain or superhero from england to drive. we will see ads -- it is a gorgeous car. we are also going to see ads with gorgeous men like james franco. tohas little baby tigers draw the fairer sex in. know women do more car buying than men in this country. they are the decision-makers in the country.
typically, car ads have been geared toward men. a lot of carmakers -- >> changing their strategy. because you spend that much money on ads, does it equate to sales? what is the correlation? >> it is hard to judge that. it is hard to measure whether the ad equates to sales. you spend about $4 million for 30 seconds this year. depending on what kind of ad you're doing, you may spend $3 million on producing it. sarah mclachlan is doing an audi ad. it has to do with the aspca. it will be funnier. they have to pay her. they have to pay for the rare breed of dog they are using in the commercial. it gets pricey. >> what is the goal? as far want to beat bmw
as luxury sales in the u.s. it will be the most watched event, as it is every year, on american t.v. they think it will it equate to big sales. >> thank you. we are on the markets again in 30 minutes. "street smart" is next. >> live from new york, i am trish regan. >> i am mark crumpton. welcome to "street smart." we are heading into the final minutes of trading. stocks across the globe are tumbling. the dow is heading to the worst week since 2012. it is now off 255 points. we are seeing a selloff in emerging-market currencies. we will tell you what is behind he